Can miners switch to Ethereum Classic (ETC)?

After Ethereum founder Vitalik Buterin encouraged miners supporting PoW to switch to Ethereum Classic (ETC), the founder of DCG (Digital Currency Group) also made a similar call.

On August 6, Barry Silbert, founder and CEO of Digital Currency Group, tweeted, “We fully support ETH PoS, and we do not intend to support any ETH PoW forks except ETC. ETH miners should transfer their computing power to ETC to maximize long-term revenue.

In fact, according to 2miners data, since July, the ETC network computing power has increased significantly, from around 20Th/s to 31.94Th/s, an increase of more than 50%. As of press time, the ETC network computing power is 30.06Th/s.

According to miningpoolstats data, ethermine.org, 2miners.com, hiveon.net, f2pool.com, and poolin.com are the main ETC mining pools.

Previously, due to the merger of ETH and the transfer of miners, ETC experienced a short-term surge. However, some industry insiders are not optimistic about this situation.

Messari analysts said that the Ethereum merger narrative will not drive ETC's sustained rise. ETC may surge in the days before the merger, but it has no long-term upward momentum.

Messari said that Ethereum mining currently accounts for 97% of graphics processing unit (GPU) mining revenue, with daily revenue of $24 million. After the Ethereum merger, miners will be forced to sell their equipment or switch to ETC mining, which currently accounts for 2% of GPU mining revenue and nets about $700,000 per day. This huge gap in profitability means that even if a "meaningful portion" of miners migrate to ETC, the mining difficulty will increase dramatically and make many miners unprofitable.

According to Messari, Ethereum Classic has less than half the number of active addresses as Cardano, the network is currently at less than one-tenth the level of Ethereum and Cardano, and has not seen meaningful growth in transaction volume since 2018. " Ultimately, price should have some fundamental correlation to network usage and underlying economic activity, and unfortunately for ETC holders, it has neither," Messari said.

Crypto KOL 0xAA said: “ ETC cannot handle the computing power of ETH miners. The most favorable solution for miners is to conduct a hard fork when the Ethereum mainnet switches to PoS and create an ETH-PoW chain, which is much more valuable than the current ETC chain. After all, the Ethereum ecosystem is much richer now than when ETC forked.

Messari analyst Dunleavy tweeted that the transaction volume and users on the ETC chain have remained basically unchanged for many years, and the application does not exist. From the basic indicators, there is no change in the chain, and developer activity has not produced meaningful changes. 97% of GPU mining revenue comes from Eth and 2% from ETC. ETC's daily rwd is about 700,000, while Eth is 24 million. If miners eventually migrate to ETC, the hash rate will increase significantly, resulting in a larger mining discrepancy, squeezing most miners out of US dollar profits. The only way to maintain profitability is for ETC prices to rise.